Music streaming numbers double

22 August 2014

LONDON: The number of subscribers to music-streaming services in Europe and the US has doubled in the past two years, according to new research, and the sites are exploring new ways to monetise their content.

Research firm Futuresource Consulting expected the number of paid-for subscriptions in these markets to pass 20m in 2014, twice the figure of 2010. At the same time, spending was predicted to reach $3bn, a 59% increase on 2013.

Most users were now using service provider apps on smartphones or tablets to access and play out music, according to David Sidebottom, senior market analyst at Futuresource Consulting.

"Wireless audio hardware is in the driving seat," he added, "with devices like wireless speakers key to the development of streaming music subscription services, providing an additional layer to the user experience beyond a personal listening experience via headphones or a standard docking station."

SoundCloud has become the latest streaming service to introduce advertising, with Red Bull, Jaguar and Comedy Central among the first brands to appear. Top-tier music creators will be given an option to have advertising shown alongside their content and to be paid a percentage of the money paid by advertisers.

"We wanted to avoid this being a bunch of unthought-through ads in your face," chief executive Alexander Ljung told The Guardian. "You won't open the site up and see a bunch of banner ads plastered everywhere. It's elegant."

A new feature offered by market leader Spotify – a 'Tastemakers' tab aims to "surface user playlists that hit certain engagement criteria" – does not currently have a commercial element but Techcrunch noted that Spotify had already considered how it can help brands become more like tastemakers on the platform "so that may be something to watch for".

That was a reference to remarks made last year by Gary Liu, Spotify's global ad product strategy director, who told Marketing Week that "users are looking to Spotify for people to tell them what great music to listen to and brands have proven that they can help with that".

But the ability of a standalone site like Spotify to survive was questioned by Quartz which saw streaming music becoming "a pawn in a high-stakes chess match involving the true titans of the tech world" as Apple, Google and Amazon entered the market and it ended up as a loss-leader for other, more lucrative business activities.